CEOs Are Taking “Risks” With AI Expansions

Senior executives are rolling the dice with artificial intelligence but can’t resist the technology’s outperformance.

Chief executive officers have a crush on their artificial intelligence deployments, so much so they’re taking excessive chances with an emerging, but unbridled technology that is the technology equivalent of the wild, wild West.

That’s the outlook from a new IBM study that concludes CEIs are willing to live with AI’s abundant risk elements as long as they keep racking up huge productivity and performance gains with the technology.

This from the study, which canvassed 3,000 senior executives from the banking and finance sector.

– Two-thirds (66%) of banking and financial markets CEOs surveyed said that the potential productivity gains from AI and automation are so great that they must accept the risks to stay competitive.
– 65% of financial institution leaders say that succeeding with AI will depend more on people’s adoption than the technology itself, and 60% recognize that they are pushing for AI adoption more quickly than some might find comfortable.
– Half (50%) of financial services CEOs surveyed say they are hiring for generative AI-related roles that did not exist last year, and 53% indicate they are struggling to fill key technology positions.

Under Pressure

“Our research reflects the tremendous pressure CEOs face to keep their competitive edge. Alongside profitability and productivity, getting the right skills remains a persistent challenge, with CEOs now hiring for roles that did not exist until recently,” said Shanker Ramamurthy, global managing partner of banking & financial markets, at IBM Consulting. “Workforce needs are shifting rapidly in the financial services sector, and CEOs must ensure that upskilling programs are prioritized as an important element of any financial institution’s enterprise strategy for scaling generative AI.”

Perhaps the most alarming takeaway from the IBM study is that C-suite leaders are so pleased with the results they’re getting from AI that they’re more than willing to trade that operation success for a healthy dose of risk vulnerability from their artificial intelligence, especially in key areas like cybersecurity and compliance.

According to the report, 67% of CEOs said they would risk more than their competitors to maintain their competitive edge.

However, those same CEOs draw the line at alienating customers due to an over-reliance on a brand-new technology that hasn’t sealed off its operational risk elements. IBM reports that 64% of surveyed BFM CEOs say “maintaining customer trust” will significantly impact success more than any specific product or service. Another 83% noted that full transparency around a company’s AI rollout was “critical” for gaining among customers, business partners, and staffers.

“CEOs in the banking and financial markets sector are keenly aware of the competitive benefits that generative AI will bring and are eager to move quickly,” said John Duigenan, distinguished engineer & general manager of the global financial services Industry at IBM. “In their enthusiasm to embrace the benefits of this potent new technology, it’s critical that financial services leaders ensure their institutions are taking steps to engineer trustworthy AI designed to reduce risk and win the confidence of their customers, employees, and regulators.”

C-level executives will have to learn to get out of their own way, too.

According to the report, 64% of CEOs say their organization’s success is “directly tied to the quality of collaboration between finance and technology, yet half (50%) say competition among their C-Suite executives sometimes impedes collaboration.”

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